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Mark Linsmeier is a Business Consulting Operational Excellence Practice Leader at Tribridge. Read More

Enterprise resource planning (ERP) technology has evolved significantly in the past decade. Thanks to innovation across a range of accounting and planning solutions, as well as the continuous improvements taking place in the data management arena, small- and medium-sized manufacturers can now gain insights that would have once been far too expensive to acquire.

The first step is understanding why modern ERP implementation is a necessity to remaining competitive in the modern marketplace. Although SMB manufacturers might already have an ERP system in place, it's possible that it's not serving their interests as well as a more advanced one could. What's more, many SMB manufacturers may already be using the right ERP solution, but not doing so to its full potential, essentially leaving cost-savings and revenue-driving opportunities on the table.

Throughout this 5-part series, we will take you through why ERP optimization needs to be a priority and how the implementation process should go to get the most out of the investment right from the start and throughout its lifecycle.

Why Invest in Stronger ERP?

ERP is important because it pulls together all of the different functions of a business into one system. So, not only your financials, but all underlying business processes and transactions that an SMB manufacturer would encounter.

From material purchases, product manufacturing and inventory to labor costs and customer orders, transparency and data control are critical to maintaining the strongest possible performances. All of those functions are built into a properly implemented ERP system. Some will also include customer relationship management data and information from other sources across business processes and departments. And, because of that, it has complete visibility to how a company is performing – where they're doing well, where they're not doing as well and maybe where they need to improve.

One of the things we find when we work with customers is they have systems that are either outdated or not being leveraged to full capability and functionality. One example is requirements planning, which is one of the benefits of a properly implemented ERP system. Having a system that can look at a myriad of data points and efficiently make suggestions to the business - what they need to do to manage it - can completely transform the ways in which decisions are made and operations are run. This includes suggesting what to order or produce and by when, how much inventory to carry of each product, capacity planning, and management of resources.

We find many times customers haven't implemented that functionality, or they haven't done so correctly, either because they don't know how, haven't maintained it, or maybe the underlying data isn't structured properly. But it is a big time-saver when done correctly, and it helps with efficiencies, and reduce overall costs.

This is just one example of the true power that comes with modern ERP systems, and there are plenty more examples that can have equally valuable impacts on a SMB manufacturer. The best part is these solutions have been commoditized, meaning they are no longer only available - from the perspectives of budget and specialized skill - to the largest enterprises in the world.

The Implementation Process

We take a road-mapping approach to ERP implementations to ensure projects stay on track and on budget, all the while bringing the full breadth of objectives, needs and capabilities to the forefront and keeping them visible throughout the duration of the process. This includes the development of executive objectives, review of business needs, definition of future state vision, identification of changes and constraints, and finally establishment, and delivery of a clearly outlined roadmap.

Stay tuned for part two of the series to learn more about a proper implementation strategy.